SFO backs Government over referral of Rover

Richard Alderman, the director of the Serious Fraud Office, has said Lord
Mandelson was "absolutely right" to refer the collapse of MG Rover
to his organisation, despite rejecting the chance to launch a criminal
investigation.

Speaking to The Daily Telegraph, Mr Alderman said that after taking time "mastering a complex report" it "wasn't a difficult decision" to conclude there were no grounds to pursue an inquiry.

"I am very conscious of the victims – its employees, their families and an area like Longbridge – but ultimately I have to take a decision about what is right," he said.

The SFO was asked to consider the collapse of MG Rover last month after Lord Mandelson, the Business Secretary, received an inspectors' report commissioned by the Government in 2005.

Particular focus was placed upon the so-called "Phoenix Four" – John Towers, Nick Stephenson, Peter Beale and John Edwards – who are believed to have collected £30m-£40m from their ownership of MG Rover between 2000 and 2005. Their advisers' role was also examined.

A spokesman for the Phoenix Four said they were "flabbergasted" that Lord Mandelson had referred the case to the SFO, with the Business Secretary responding that the 6,000 people who lost their job would have been "flabbergasted" if he had not. Lord Mandelson is now believed to be consulting lawyers about potentially barring the four men from being company directors.

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Mr Alderman said it was right that the SFO was allowed to study the report, given that it had taken four years and cost £16m to compile.

The delayed report is now due to be published on September 11. Mr Alderman made the decision not to investigate himself after asking a team of four SFO investigators to conduct a "dispassionate analysis of the facts" in the report.